This tech giant just went all-in with their new streaming product.
Their pricing signals that they are willing to lose billions, in order to bury the competition.
The streaming giant will burn through about $3 billion of cash this year alone, and still needs big price hikes and subscriber increases, just to break even.
Apple streaming service
Apple takes on Netflix with a $5-a-month streaming service
CUPERTINO, Calif. (AP) — Apple is finally taking on Netflix with its own streaming television service and, uncharacteristically for the company, offering it at a bargain price — $5 a month beginning on Nov. 1.
Walt Disney Co. is launching its own assault on Netflix the same month, for just $7.
It may be sheer coincidence that the cost of paying for both Apple and Disney subscriptions will still be a dollar less than Netflix’s main plan, priced at $13 a month. But the intent to disrupt Netflix’s huge lead in the streaming business couldn’t be clearer.
Apple delivered the news Tuesday while also unveiling three new iPhones that won’t look much different than last year’s models other than boasting an additional camera for taking pictures from extra-wide angles.
The aggressive pricing is unusual for Apple, which typically charges a premium for products and services to burnish its brand. Most analysts expected Apple to charge $8 to $10 per month for the service, which will be called Apple TV Plus.
But Apple is entering a market that Netflix practically created in 2007 — around the same time as the first iPhone came out. And Netflix has amassed more than 150 million subscribers, meaning that Apple needed to make a splash.
“You have to expect they’re going to do something, considering how hyper competitive the streaming video space is,” said Tim Hanlon, CEO of Vertere Group.- Source